Insurance premiums are growing as medical care becomes more expensive
Health insurance costs continue to grow throughout the United States and this is having an impact on premiums for many consumers that have purchased coverage through insurance exchanges. These exchanges were established through the Affordable Care Act and serve as a way for people to find less expensive policies than can be found through the private market. While this was initially true for many, the policies provided through exchanges are becoming more expensive with each passing year.
Data suggests that premiums will increase by an average of 20%
According to recent data from the Obama Administration, policies sold through exchanges throughout the country will see an average increase in premiums of an average of 20%. In some states, premiums are growing by a more significant margin, where premiums are seeing only modest increases in other states. In many cases, premiums are on the rise because of the growing cost of medical care, and insurance companies offering policies through exchanges must find ways to recover from losses.
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Insurance mandate is leading to increased insurance costs
Another factor leading to higher premiums is the fact that health insurance has become mandatory due to federal law. All U.S. citizens must have a minimum level of coverage, which must adhere to certain standards. Typically, policies that meet the minimum requirements of federal provisions offer consumers more benefits and better coverage options. As such, these policies are more expensive for insurers to manage, and increasing premiums allows them to manage the costs associated with these policies more effectively.
Premium increases may stabilize in the coming years
How long insurance premiums will continue to grow is not certain. Analysts believe that there will be a stabilizing point in the coming years, where premiums increase by single digit percentages, but it is difficult to tell when this will be the case. Insurers must submit rate increase proposals that must be approved before premiums can be increased on policies, but approval is often granted for rate increases due to the increasingly expensive nature of the healthcare system.